Pathlight Investors’ Top Recommended Reads - November 2014

Pathlight Investors’ Top Recommended Reads - November 2014

  • Posted on: 9 December 2015
  • By: admin

additional volatility.  Dudley echoed her comments in separate remarks.  WSJ   http://goo.gl/8VEQ9w  

 

House – the GOP could very well keep a majority in the House for the next generation at least.  NYT   http://goo.gl/Mhxp4G   

 

Net Neutrality – Wheeler to break w/Obama over net neutrality – according to the Washington Post, FCC Chairman Wheeler is preparing to move in a different direction from what Obama proposed Mon w/regards to net neutrality and industry regulation.  Wheeler apparently has told industry reps that he preferred a more “nuanced” solution vs. what Obama talked about earlier this week.  “The dissonance between Obama and Wheeler has the makings of a major policy fight”.  Washington Post  http://goo.gl/pmVDof    

 

US shale drillers are starting to idle some rigs according to data out last week; rigs targeting oil sank by 14 to 1568 last week, the lowest since Aug 22 (it peaked at 1609 back on Oct 10).  The Eagle Ford shale formation in south Texas lost the most, dropping 9 to 197.  Drillers are slowing their activity as crude prices tumble.  Bloomberg   http://goo.gl/egV7gk

 

China – President Xi told a group of global business leaders that the risks facing China aren’t “that scary” and the government is confident it can handle them.  "Some people worry that China's economic growth will fall further, can it climb over the ridge?" Xi said. "There are indeed risks, but it's not so scary.  "Even at growth of around 7 percent, regardless of speed or volume, (we) are among the best in the world," he said, noting that China's economy remained "stable".  Reuters   http://goo.gl/F3YLfe  

 

Russia/Ukraine – four reasons by Putin may be marching back into Ukraine: 1) ensure the rebel-controlled regions stay within the Russian orbit after recent elections revealed a strong pro-Western bias; 2) help the rebels retain their tenuous grip over their controlled territory; 3) ensure a supply route into Crimea; 4) ensure the rebels stay loyal and beholden to Moscow – Bloomberg  http://goo.gl/748B3j  

 

OPEC meeting coming up on 11/27 – is a production cut possible?  After being adamant that a production cut wasn’t coming, Reuters says some OPEC delegates are now “whispering” about the need for output to be curtailed.  Reaching a consensus on this matter won’t be easy and rather than formally lowering the quota OPEC may instead call for greater discipline of the existing target (right now output is ~500K BPD above the official quota – if OPEC imposes greater discipline that would be similar to a production cut).  http://goo.gl/35YkLl  

 

And On A Lighter Note…

 
Arctic storm has Colorado shoveling ... tumbleweed - http://goo.gl/6SRPzJ

 

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Third Quarter Investment Review

Third Quarter Investment Review

  • Posted on: 9 December 2015
  • By: admin

The following is an excerpt from our Third Quarter Investment Review, which can be found HERE

As we sit down to pen our 3Q review letter, we are faced with equity markets that have experienced a marked change in their behavior.  The sanguinely steady upward march of this bull market has been replaced by heightened volatility, extreme upward and downward moves of greater than 1%, and an increased level of fear that this time is different and that a correction within the bull market could morph into a decline of some magnitude—we even hear that we could experience another 2008/2009-style meltdown.

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Pathlight Investors’ Top Recommended Reads - October 2014

Pathlight Investors’ Top Recommended Reads - October 2014

  • Posted on: 9 December 2015
  • By: admin

Ready for some more great articles?  Here's our picks for October 2014:   

The Fed – despite the financial market dislocation and market chatter of QE4, it doesn’t sound like the Fed is too alarmed w/recent trends.  A lot of people have cited the Williams interview w/Reuters from Tues (http://goo.gl/jpe4mr)  in which he talked about the possibility of more purchases.  

However, Williams didn’t really endorse QE4 but only acknowledged the possibility should the outlook change “significantly”. Meanwhile, Dallas Fed President Fischer (speaking to Fox Business during the day Wed http://goo.gl/ZWqi5C) warned investors not to conflate a market correction w/an economic downturn.  Finally, according to Bloomberg (in an article that crossed late in the Wed sessionhttp://goo.gl/ylOzso), Yellen remains confident in the US economic outlook (Bloomberg cited remarks the Chair reportedly made at a closed-door meeting in Washington over the weekend). 

Fed – tapering still going to happen in Oct and rate hikes remain probable by mid-’15 but Fed will stay vigilant and could alter its forward guidance in a dovish direction.  US Fed officials will reassure investors that they stand ready to act should int’l financial trends threaten the domestic recovery but tapering is likely to end as scheduled at the Oct meeting and rate hikes are probably going to occur by mid-’15.  Reuters    http://goo.gl/70vjsB  

Crude – US shale breaking point may be lower than OPEC thinks; Bloomberg discusses how OPEC (and particularly Saudi Arabia and Kuwait) are attempting to test the “pain point” for US shale frackers.  However, that threshold may be at a lower oil price than most assume.  Only about 4% of US shale output needs crude north of $80 to be profitable.  Bloomberg    http://goo.gl/yWlcFh    

 

Crude update – price weakness likely to persist given Saudi Arabia aggression and lack of OPEC coordination.  According to a WSJ report (http://goo.gl/Fk5Jqw), Saudi Arabia is making an aggressive push for global market share in both Asia and Europe.  The Kingdom recently slashed prices and is now asking buyers to commit to maximum shipments.  While some are agitating for more OPEC coordination (Venezuela in particular http://goo.gl/Ya8gQi) there aren’t any signs of a broad supply reduction (http://goo.gl/5xpJre).  Kuwait’s oil minister was quoted as saying an OPEC cut wouldn’t do much good given so much production is occurring outside the cartel (he also expressed doubt that Brent would drop below $76-77).  http://goo.gl/QhvVRQ  

 

European policy response deemed inadequate as calls grow for more coordination.  The ECB is battling w/Germany which is battling w/other European governments over the proper response to the region’s middling growth and disinflationary pressures.  Instead of reaching a solution the dithering is only exacerbating the problem.  “A growing number of policy makers and advisers say a coordinated push is now needed, comprising aggressive new ECB actions, higher investment spending by Germany and European Union institutions, and bolder economic overhauls in France and Italy” – WSJ    http://goo.gl/X6fqO3    

 

German inaction isn’t causing Europe’s economic woes – “Germany’s fiscal prudence doesn’t account for France’s 35-hour work week or Italy’s theater-of-the-absurd labor laws. The next time the finance ministers meet, perhaps Mr. Schäuble might ask his colleagues what they have done by way of reform before they start demanding another German rescue” – WSJ   http://goo.gl/QZiXoY   

 

Greece – worries that Athens is trying to exit its bailout package too early and that the antireform Syriza party may come to power have weighed on Greek financial markets – WSJ   http://goo.gl/xrjLlG  

 

And On A Lighter Note…

Parrot missing for years returns speaking Spanish: http://goo.gl/w1Le1S

 

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